Telomerase uses an internal RNA moiety as template for the synthesis of telomere repeats. In Saccharomyces cerevisiae, the telomerase holoenzyme contains the telomerase reverse transcriptase subunit Est2p, the telomerase RNA moiety TLC1, the telomerase associated proteins Est1p and Est3p, and Sm proteins. Here we assess telomerase assembly by determining the localization of telomerase components. We found that Est1p, Est2p and TLC1 can migrate independently of each other to the nucleus. With limiting amounts of TLC1, overexpressed Est1p and Est2p accumulated in the nucleolus, whereas enzymatically active Est2p-TLC1 complexes are distributed over the entire nucleus. The distribution to the nucleoplasm depended on the specific interaction between Est2p and TLC1 but was independent of Est1p and Est3p. Altogether, our results suggest a role of the nucleolus in telomerase biogenesis. We also describe experiments that support a transient cytoplasmic localization of TLC1 RNA.